New housing construction beats forecasts in January

New residential construction in the US was more robust
than expected in January according to the Census Bureau,
even as builders continued to face labor and land shortages.

Housing starts fell by 2.6%, but at a higher-than-forecast
seasonally adjusted annual rate of 1.246 million. Starts for
December were revised up to a rate of 1.279 million.

Building permits increased by 4.6% at a rate of 1.285 million,
suggesting that construction may rebound in the months
ahead.

Economists had forecast that housing starts were flat compared to
the prior month, at a seasonally adjusted annual rate of 1.226
million, according to Bloomberg. They had estimated that building
permits were little changed as well, up by 0.2% to a seasonally
adjusted annual rate of 1.23 million.

Builders continue to struggle with labor shortages and a lack of
developed lots, according to the National Association of
Homebuilders (NAHB). The NAHB's February report on builder
sentiment showed that optimism settled back to a "normal range"
as buyer traffic fell.

Housing starts tend to be volatile month-to-month, especially in
the multifamily segment.